KKR’s billionaire founders step down as co-CEOs

KKR & Co Inc has elevated its co-presidents Scott Nuttall and Joseph Bae to co-chief executive officers, succeeding the storied private equity firm’s billionaire co-founders Henry Kravis and George Roberts.

Kravis, 77, and Roberts, 78, would remain involved in the running of the firm as executive co-chairmen.

Kravis and Roberts have an estimated net worth of $8.6 billion and $9.1 billion, respectively, according to Forbes magazine.

The transition has been in the works for years and is unlikely to surprise the firm’s investors.

KKR had named Bae, 49, and Nuttall, 48, as co-presidents in 2017.

“We view the moves as orderly, and would not expect any breakage in assets under management or earnings,” Citigroup Inc analysts wrote in a note to investors.

Nuttall and Bae will face a challenge replicating the successful working relationship of the two cousins who started KKR 45 years ago.

From having their last names as two of the three initials in KKR to fostering a close-knit culture of old-school Wall Street loyalty, Kravis and Roberts have maintained a tight grip on the firm and helped shape the leveraged buyout industry.

The move leaves Blackstone Group Inc CEO Stephen Schwarzman, 74, as the only founder of a major publicly listed private equity firm not to have relinquished the role of chief executive officer, though his No. 2, president and chief operating officer Jonathan Gray, has been in line for years to succeed him.

In 2018, Carlyle Group Inc CEO Kewsong Lee took over from co-founders David Rubenstein, William Conway and Daniel D’Aniello, and Ares Management Corp CEO Michael Arougheti succeeded co-founder Tony Ressler.

Apollo Global Management Inc cofounder Marc Rowan became CEO in March, replacing Leon Black who stepped down in the wake of scrutiny of his ties to the late financier and convicted sex offender Jeffrey Epstein.

Nuttall and Bae both joined KKR in 1996. Nuttall had previously spent less than two years at Blackstone, while Bae had a similarly short stint at Goldman Sachs Group Inc’s principal investments group.

Nuttall helped take KKR public, a process that involved merging the firm with an Amsterdam-listed fund in 2009 and then moving the listing to New York in 2010.

He has been a fixture on the firm’s quarterly earnings call with Wall Street analysts and also ran KKR’s capital markets, insurance, credit, hedge funds and fundraising initiatives.

Bae has been the main driver of KKR’s expansion into Asia, making the firm one of the largest US private equity investors on the continent.

The Korean-American dealmaker also sat on the investment committees of KKR’s global private equity business.

In addition to its leadership changes, KKR said on Monday that it would take steps to eliminate its dual-class share structure.

Carlyle was the first major publicly listed private equity firm to do this in 2019, followed by Apollo this year.

KKR said that its common shareholders would be able to vote on a one-toone basis on all major important issues, including the election of board directors.

It added that this would be achieved though a complex web of mergers of KKR entities to be completed by 2026.